29 June 2023
The 50-year partnership between the diamond-mining giant and the state is on the line as a new agreement is yet to be signed. Botswana and diamond-mining giant De Beers are negotiating as Friday is D-Day for the expiry of a five-decade partnership
The clock is ticking towards the expiry of the partnership agreement between Botswana and diamond-mining giant De Beers, with the government saying on Thursday that no deal has been finalised, despite a Friday deadline looming. Botswana’s minerals and energy minister Lefoko Moagi told the media in Gaborone on Thursday afternoon that negotiations are ongoing, and they are working around the clock to reach an agreement.
“I am sure you all know Friday is D-Day, so I can only tell you, wait for Friday. But having said that, yes, we are making headway … we are busy on those terms, we are working around the clock to make sure we can conclude a deal or no deal, whatever will come on Friday,” Moagi said.
In February, speaking at a ruling party rally near Gaborone, Botswana’s president Mokgweetsi Masisi described negotiations with De Beers as equivalent to “shaking a giant”. The company and the government jointly own Debswana, a diamond-producing company established 55 years ago. They are in talks to renew a 2011 marketing and sales agreement for the production of rough diamonds from Botswana through Debswana, which allows De Beers 75% production. The government is pushing for an improved deal which will see the owners of the minerals getting a bigger slice of the pie.
Debswana was established in 1969 as an equal partnership between De Beers and the Botswana government. It employs 5,000 people full-time in its operation of four mines: Jwaneng, Orapa, Letlhakane and Damtshaa, which produce 95% of Botswana’s stones.
The partnership came under fire from Masisi in February. The president reportedly threatened to walk away from talks if Botswana did not get a bigger share of Debswana’s output by marketing outside the De Beers system.
Botswana is the world’s leading diamond producer in terms of value and only second to Russia in terms of volume, with De Beers, a South African company, being the world’s leading diamond company.
Moagi said they are “very optimistic and hopeful” that the negotiations will “gravitate towards a shared win”. The negotiations come at a time when the Botswana government has concluded a partnership with Belgian diamond-purchasing and refining company HB Antwerp, which set up an office in Gaborone in December.
The Botswana government owns a 24% stake in HB Botswana, HB Antwerp’s first diamond-manufacturing facility outside Belgium. There’s speculation that if De Beers and the government fail to reach an agreement and go their separate ways, HB Antwerp stands a chance of being considered as a replacement partner.
